The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

1. (1) Control (including the terms "controlling," "controlled by," and "under common control with")--The possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporation office held by the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote or holds irrevocable proxies representing, 10% or more of the voting securities or authority of any other person. This presumption may be rebutted by a showing made in the manner provided by the Insurance Code §823.010 that control does not exist in fact. The commissioner may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support such determination, that control exists in fact, notwithstanding the absence of a presumption to that effect, where a person exercises directly or indirectly, either alone or pursuant to an agreement with one or more other persons, such a controlling influence over the management or policies of an authorized health maintenance organization as to make it necessary or appropriate in the public interest or for the protection of the enrollees or shareholders of the health maintenance organization that the person be deemed to control the health maintenance organization.
2. (2) Controlled health maintenance organization--A health maintenance organization controlled directly or indirectly by a health maintenance organization holding company.
3. (3) Controlled person--Any person, other than a controlled health maintenance organization, who is controlled directly or indirectly by a health maintenance organization holding company.
4. (4) Health maintenance organization holding company--Any person who directly or indirectly controls any health maintenance organization, except that it shall not be deemed to include: the United States, a state or any political subdivision, agency, or instrumentality thereof, or any corporation which is wholly owned directly or indirectly by one or more of the foregoing.
5. (5) Person--Any natural or artificial person, including, but not limited to, individuals, partnerships, associations, organizations, trusts, or corporations, but shall not include any securities broker performing no more than the usual and customary broker's function.
6. (6) Subsidiary--An affiliate controlled by a specified person directly or indirectly through one or more intermediaries.
7. (7) Voting security--Includes any security convertible into or evidencing a right to a acquire a voting security.

Source Note:The provisions of this §11.1201 adopted to be effective December 4, 1987, 12 TexReg 4365; amended to be effective November 15, 2006, 31 TexReg 9298.